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Justice for sale? Backers of shadow groups pushing money into NC judicial election may have high stakes in outcome

What do Big Tobacco, insurance interests, and a D.C. group that's spent millions to help Republicans draw political lines all have in common?

In North Carolina, they've all put big money into a pair of super PACs that want to re-elect Justice Paul Newby and maintain the state Supreme Court's 5-4 conservative majority. And many could have critical business before the state's highest court in the coming months.

The race between Newby and challenger Sam Ervin is on pace to shatter all earlier spending records for a state supreme court seat -- largely due to two groups spending on Newby's behalf. One is the NC Judicial Coalition, known for their ubiquitous "banjo" ads that say Newby is tough on crime. Recent reports show the Judicial Coalition has unleashed more than $1.3 million worth of communications supporting Newby.

Where has the NC Judicial Coalition's money come from? Their latest filings with the state election board show $163,700 from an independent spending arm of the NC Chamber; $100,000 from the parent company of R.J. Reynolds Tobacco; and $25,000 each from GOP donors Bob Luddy and Neil Bender.

But so far, the biggest source of the NC Judicial Coalition's money, according to reports -- $720,000** out of about $1.6 million raised -- has come from another, more secretive group: Justice for All NC.

Created in May 2012, Justice for All NC claims in its IRS filings that its mission is to "promote justice for all citizens and support qualified candidates for judicial office." In practice, its role appears to serve as a funnel for a wide variety of special interests -- some with likely business before the N.C. Supreme Court -- to pour money into the NC Judicial Coalition.

Justice for All NC has been secretive about its operations. For months, they listed only one contact -- Amy Ballantine Ellis, the group's treasurer and sister of former GOP legislator Patrick Ballantine. In June, Ellis told the News & Observer they were "not ready to comment publicly" on their operations.

WHO'S FUNDING IT?

The latest reports show what Justice for All has been up to: raising money, and lots of it, to help fund the NC Judicial Coalition's pro-Newby efforts. Among the biggest donors revealed in Justice for All's latest filings with the N.C. elections board:

Republicans were successful in drawing favorable lines -- but the plan has been challenged, and the next step is the N.C. Supreme Court.

* REYNOLDS AMERICAN - $100,000. The owner of R.J. Reynolds Tobacco, Reynolds has been a big source of outside money in this year's state elections, giving at least $200,000 to Real Jobs NC and $100,000 directly to the NC Judicial Coalition. The latest reports show they've given $100,000 to Justice for All NC as well.

R.J. Reynolds often finds itself with business before the N.C. Supreme Court. In 2009, for example, Paul Newby wrote for the majority in a 5-2 decision siding with R.J. Reynolds in a dispute over payments to growers under the tobacco settlement.

* AMERICAN FEDERATION FOR CHILDREN - $100,000. AFC is a national 501(c)(4) group promoting school privatization initiatives and a leading backer of N.C. Citizens for Freedom in Education -- which itself gave $10,000 to Justice for All in September 2012.

In the last N.C. legislative session, Rep. Paul Stam (R-Wake) introduced a bill to create Tax Credit Scholarships -- what opponents call "neovouchers" -- that would allow corporate donations to nonprofits for private-school scholarships, diverting up to $40 million in state taxes annually. The bill didn't make it out of committee.

But if such a law passed in North Carolina, the N.C. Supreme Court would likely play a critical role in any legal challenges. Unlike the constitutions of many other states, North Carolina's doesn’t have provisions prohibiting public funds from aiding sectarian organizations or banning obligatory support of religious organizations through tax breaks, stumbling blocks to voucher programs elsewhere. In North Carolina, the decision could come down to the justices' interpretation of the uniformity clause, which requires public schools to be of “like kind throughout all sections of the state and available to all of the school population of the territories contributing to their support."

* NORTH CAROLINIANS FOR AFFORDABLE HEALTHCARE ($100,000) AND MEDICAL MUTUAL ($75,000). A spin-off of the North Carolina Medical Society, North Carolinians for Affordable Healthcare has been pushing for limits on non-economic damages in medical malpractice suits -- as has Medical Mutual, a company providing malpractice and liability insurance to doctors and other health care providers. This is another issue that could likely come before the N.C. Supreme Court.

WHO'S RUNNING IT?

Justice for All NC has been quiet about its leadership. It wasn't until Oct. 19, in an Internal Revenue Service filing, that the group listed any principals aside from Amy Ellis, the custodian of books. The October filing listed two other leaders, which at first glance seem curious choices to be running such a critical operation:

* RANDALL RAMSEY: The owner of a yacht business, Ramsey lost in his May 2012 primary bid to be the GOP candidate for N.C. Senate District 2. He has a history of donating to Democrats.

** NOTE: An earlier version of this story reported that Justice for All NC had made $3905,000 in contributions to NC Judicial Coalition. A 10/26 state election board filing from NC Judicial Coalition shows another $325,000 money transfer from Justice for All NC to the Judicial Coalition; however, Justice for All NC has so far not filed a report acknowledging that contribution.

For more on the outside money in North Carolina's 2012 elections, visit the Institute's website FollowNCMoney.org

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